Talk Story


Sunday, June 2, 2002

Is Hawaii truly a ‘Tax Hell?’
Not necessarily

MY SISTER in rural Maine gets her water from a well. She adds salt periodically to the treatment system in her basement to soften the water enough for laundry and bathing. There's still too much arsenic in the water to use it for drinking or cooking, so she hauls jugs of water home from the grocery store.

Twice a month, she loads up her station wagon with bags of rubbish and drives to the dump where she buys a stamp for each bag. They cost a dollar apiece. No wonder she has a trash compactor in her kitchen and burns paper refuse in the wood stove.

When it snows -- this is Maine, remember -- she revs up the old Toyota pickup and plows the mile of gravel lane between her house and the town-maintained road. Her "road association" neighbors want to deed the lane to the town, but the town won't take it. Postmen and school buses won't use it, so she makes daily trips to the post office and drives the kids to the bus pickup.

Most years, the lane washes out when the snow melts. Rocks poke up through the sandy gravel turning the hills into washboards. The association pays a grader operator to scrape the lane smooth after mud season.

THE REASON I mention this is that there's a lot of talk about Hawaii being a "Tax Hell."

According to the independent Tax Foundation, Maine's state and local tax burden of 12.8 percent is higher than Hawaii's -- the highest in the nation, in fact. Hawaii ranks fourth nationally at 11.6 percent. New York and Wisconsin are second and third on the list.

If you compare the services I get from state and local government here in Hawaii -- good water, twice-weekly curbside trash pickup, paved roads and sidewalks, convenient public transportation, schools, parks, libraries -- and what my sister gets in Maine, our tax burdens aren't even close. I'm getting service; she's getting soaked.

Moreover, tax statistics that show up regularly in publications like Forbes rarely take into account the large portion of Hawaii taxes paid by nonresidents -- about a third of the excise tax, for example.

To accurately calculate Hawaii taxes per capita, you need either to subtract the taxes paid by visitors or increase the number of "capitas" to reflect all those tourists who help shoulder the burden.

BUT WHAT about taxes on cigarettes, gasoline and booze?

At $1 a pack, Hawaii's cigarette taxes are the nation's third highest. Only New York ($1.50 per pack) and Washington ($1.425) place greater burdens on nicotine addicts.

If you drink the hard stuff, you pay the state $5.92 per gallon. Three states, Florida ($6.50) New Mexico ($6.06) and New York ($6.44), have higher taxes on spirits. In 18 other states the government controls all liquor sales, making comparisons difficult.

Wine sippers in Hawaii pony up $1.38 per gallon in state tax. Only six states have higher taxes on wine, led by Florida's $2.25 per gallon.

However, where Hawaii truly stands above the rest is in taxing beer and gasoline. State taxes on gas run $.364 a gallon and our levy on the suds is $.93 per gallon, both are the highest in the entire nation.

So, suck 'em up, brah. You're not just having a cold one. You're fixing our roads and educating our kids, too.

John Flanagan is the Star-Bulletin's contributing editor.
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